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Property Investment: Is London Still the Place to Be?

Property Investment: Is London Still the Place to Be?

As far as many property investors seem to be concerned, the streets of London are still very much paved with gold. Many domestic and international buyers – at least those who can afford the high prices – seem to believe that the capital is the place to be when investing in UK property.

However, many recent headlines have also been touting the rise of the UK’s other cities, as well as identifying the relatively low yields that London offers in comparison to other markets. Is London still the star of the UK property market, or are regional destinations a better bet on the whole?

The Benefits of the Regions

There are two key benefits of regional property investment, as opposed to investment in London and its immediate surroundings. The first is that property prices are lower – potentially massively lower. This naturally makes investment more affordable, and even makes it accessible to some private investors who could never afford to invest in the capital. Despite being cheaper to get into, many of the key regional markets offer returns that are significantly ahead of those offered in London, creating opportunities that are simultaneously more accessible and more profitable.

Of course, there are many different markets in the UK besides London and these vary quite a lot. Some completely fail to live up to this low-cost, high-yield profile, while others live up to it in quite different ways. However, many key markets – especially major cities – present excellent opportunities for investors who prioritise returns, or who simply cannot afford to invest in London. For example, Manchester offers excellent yields and very strong growth forecasts due to large volumes of investment and a fast-rising population. Birmingham, meanwhile, recently ranked higher than any other UK city in the latest global property investment rankings.

The Advantages of London

With properties in many of the UK’s other cities both cheaper and higher-yielding than those in London, it is easy to think that there is no longer any good reason to invest in the capital. However, this is not necessarily the case. London is a bustling city with extremely high demand in both the residential and commercial sectors. This makes properties extremely easy to fill, and these levels of demand are something that regional markets manage to rival at best but not to surpass.

However, the biggest example of London is undoubtedly the security on offer, and it is this that keeps UK and international investors coming to the city. London is the centre of the UK’s economy, and plays a major role in the global economy as well. While a correction of some kind is not out of the question, London’s importance keeps demand high and makes a drastic fall in property values highly unlikely. As such, a lot of investors who value low levels of risk continue to look to prefer the safety of London over the higher profits of regional markets – at least for a portion of a portfolio.




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